BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Corporate earnings for Q2 FY22 came in above our expectations, singularly led by commodities such as metals and oil and gas. Excluding these two sectors, aggregates were in-line.
The quarter brought to the fore two important trends:
an improving demand environment post the opening up of the economy and rising vaccinations, and
the impact of rising input costs on operating margins.
Thus, the operating margins of specialty chemicals, autos, cement and consumer staples contracted.
For our coverage universe, the earnings upgrade to downgrade ratio for FY22 stands at nearly 1:1 as 51 companies saw earnings upgrades of more than 5%, while 55 companies were downgraded by more than 5%.
Management commentaries indicated an improvement in the overall demand scenario, albeit with caution around operating margins, given the inflationary input price environment.
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